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I am 100,000.00 in debt. is there any way to avoid bankruptcy?

Porterville, CA |

I am 100,000.00 in debt on credit cards. own no home, have 3 kids and only a part time job. Any way to get out of debt without bankruptcy?

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Attorney answers 4


Have you attempted to speak to a credit counseling agency. They can generally reduce your bills and make it so you pay one single payment a month.

However, it is important that you do your research. While there are reputable agencies out there who will assist consumers, there are many agencies who not reputable. Be cautious when and if you consult these people. You still may want to discuss your options with a licensed bankruptcy attorney. Many offer an initial free consultation.

Mr. Lundberg is licensed to practice law in California. The response herein is not legal advice and does not create an attorney/client relationship.


You can try a debt settlement. Often the banks will work with you to settle those debts. Make sure you hire a lawyer to help, it makes a big difference. Our law firm has helped many in settling their debts.

Good Luck
Shah Peerally
Founder and Managing Attorney of Shah Peerally Law Group PC
Law Firm Deals in Immigration law, Bankruptcy & Debt Relief

Note: The above answer is provided for informational use only. One should not act or refrain
to act solely based on the information provided. No attorney client relationship is created unless a retainer is signed by the attorney and the client.


I agree with my colleagues that debt settlement is an alternative to bankruptcy. The only downside to debt settlement is that the creditors usually want payment in a lump sum. Many individuals are unable to come up with the one time large payment.

I wish you the best of luck in finding a resolution to this matter.

Disclaimer: The materials provided herein are for informational purposes and neither constitute legal advice nor should they be relied upon as legal advice. Every situation is fact sensitive, and it is impossible to evaluate a legal problem without a comprehensive consultation and a review of all facts and documents at issue. This answer does not create an attorney-client relationship. I am a California Bankruptcy lawyer.


Be careful. Debt settlement is often a bad idea compared to bankruptcy.

First of all I have had numerous clients that have come to me after paying thousands of dollars to a debt settlement company having accomplished nothing. Some of the debt settlement companies use the monthly money you pay to the debt settlement company to only pay the most aggressive companies - sometimes only the ones that have sued. But one of your goals was to avoid being sued. Hopefully you can avoid this problem by hiring a good debt settlement company instead of one that rips you off.

Another problem with debt settlement is that you might have to pay taxes.

Let’s assume you (or your debt settlement company) negotiates a reduced pay off of a debt. It is very likely that the creditor will issue a 1099-C. This is a notice to IRS of the forgiven debt. Forgiven debt is income.

For example, let’s say you owe Mastercard $10,000 and they agree to accept $5,000 in full and final payment of the account. Great, you’ve saved $5,000. But you now have $5,000 of income that is reported to the IRS.

Fortunately, if you are insolvent when this happens you are not taxed on this income. But you must explain this to the IRS when you file your tax return.

Ok so let’s assume you’ve avoided being ripped off by a bad debt settlement company. You’re insolvent so you have no tax problems. You’ve avoided bankruptcy. But you’re broke because you’ve given all your money to the creditors in accordance with the debt settlement plan. Please consider whether it might have been better to have filed for bankruptcy. If you plan your bankruptcy properly you can keep a considerable amount of assets. Talk to someone that knows about how these actions effect on your credit rating. You might be surprised about the effect of all this on your credit rating. Paying off the debts at a discount might not be any better for your credit rating than filing bankruptcy.

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